LUV Stock Analysis: Buy, Sell, or Hold?
LUV - Southwest Airlines Co.
$38.50
-0.83 (-2.11%)
▼
5d:
-6.8%
30d:
-5.24%
90d:
-24.67%
HOLD
LOW Confidence
Analysis Updated: May 15, 2026 12:00 AM ET
Earnings: Jul 22, 2026
Smart Money Accumulation
LUV is down 6.8% this week, but smart money is accumulating calls. Top strike: $55 2026-06-18 with 41,836 OI. Call ratio: 69% View Scanner →
Strength: 5.3/10
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2 traders called LUV this week
50% bullish • 1 bearish
50% bullish • 1 bearish
Interactive Price Chart (1 Month)
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Bottom Line:
📊 HOLD: LUV shows mixed signals. Fine to hold existing positions. Not urgent to buy or sell.
📊 HOLD: LUV shows mixed signals. Fine to hold existing positions. Not urgent to buy or sell.
Long-Term Wealth Forecast (2031)
Based on Analyst Consensus Growth & Historical Valuation
0% (Stagnation)
50% (Hyper Growth)
EST. PRICE IN 2031
$95.55
Based on 14.5% avg growth
INTRINSIC VALUE TODAY
$59.33
35.1% Margin of Safety
How this is calculated: We use a Growth Decay Model: starting with analyst consensus growth (adjusted above) and gradually slowing it down to a long-term terminal rate (4%) by Year 5. This provides a more realistic valuation than assuming constant hyper-growth. We then apply a 10.9x Exit PE.
In-depth Analysis How we analyze
Valuation Analysis: LUV is currently trading at $38.50, which is considered slightly low relative to its 30-day fair value range of $38.26 to $41.10. From a valuation perspective, the stock is trading at a discount (Forward PE: 8.6) compared to its historical average (10.9). Remarkably, the market is currently pricing in an annual earnings decline of 7.7% over the next few years. This pessimistic expectation contrasts with the company's recent 50.8% earnings growth, suggesting potential undervaluation if the company simply maintains stability.
Technical Outlook: Technically, LUV is in a downtrend. The price is currently testing key support at $37.94. A bounce from this level would confirm strength, while a break below could signal further downside.
Market Sentiment: The stock shows a mixed technical setup (45/100), with neutral trendline and momentum signals. Wall Street analysts see significant upside, with an average price target of $45.25 (+17.5%). The stock is fairly positioned - fine to hold existing positions or accumulate slowly on dips, but not an urgent buy.
Technical Outlook: Technically, LUV is in a downtrend. The price is currently testing key support at $37.94. A bounce from this level would confirm strength, while a break below could signal further downside.
Market Sentiment: The stock shows a mixed technical setup (45/100), with neutral trendline and momentum signals. Wall Street analysts see significant upside, with an average price target of $45.25 (+17.5%). The stock is fairly positioned - fine to hold existing positions or accumulate slowly on dips, but not an urgent buy.
Quick Decision Summary
Current Position
SLIGHTLY LOW
Historical Trading Range
$38.26 -
$41.10
Company Quality Score
53/100
(HOLD)
Volume Confirmation
HIGH
Confidence Score
77.1%
Protect Your Profits
Holding LUV? Use our AI-powered strategies to protect your downside while keeping your long-term position.
View Profit Protection PlanAll Signals
- BULLISH: Price oversold vs 30-day range
- NEUTRAL: Mixed technical signals (45/100)
- BULLISH: High volume confirmation
- BULLISH: Trading below Wall St target ($45.25)
- CAUTION: Recommendation downgraded due to -6.8% 5-day decline
Trading Range Analysis
30-Day Trading Range
$38.26 -
$41.10
Current vs Trading Range
SLIGHTLY LOW
Support & Resistance Levels
Support Level
$37.94
Resistance Level
$42.39
Current Trend
Downtrend
Technical data as of
May 15, 2026
Fundamental Context
Forward P/E (Next Year Est.)
8.55
Wall Street Target
$45.25
(+17.5%)
Revenue Growth (YoY)
12.8%
Earnings Growth (YoY)
50.8%
Profit Margin
2.8%
Valuation Discount vs History
-7.7% cheaper
PE vs Historical
8.6 vs 10.9
CHEAP
Market-Implied Price Targets
If current PE multiple persists
Implied Growth (YoY):
-7.7%
(market-implied from PE analysis)
1-Year Target
$35.54
(-8%)
2-Year Target
$32.80
(-15%)
3-Year Target
$30.27
(-21%)
3-Yr Target (if PE normalizes)
(PE: 9→11)
$38.58
(+0%)
3-Year Scenarios
Using analyst projected EPS growth
Bull:
(PE: 22.1, Growth: 70.4%)
$335.28
(+771%)
Base:
(SPY PE: 8.6, Growth: 70.4%)
$129.94
(+238%)
Bear:
(PE: 7.3, Growth: 70.4%)
$110.45
(+187%)
📈
Valuation based on Current Earnings
RECOVERY PLAY: Stock looks expensive now (26x PE), but valuation improves significantly next year (9x PE) as earnings recover.
Trailing PE: 26.22 | Current EPS (TTM): $1.50
Bull Case
$86.53
(+125%)
Analyst growth 100.0%, PE expands to 28.8
Base Case
$78.66
(+104%)
Market implied 100.0%, PE stable at 26.2
Bear Case
$26.74
(-31%)
Severe decline -20.0%, PE contracts to 22.3
These are projections based on PE multiples and EPS growth scenarios, not predictions. Actual results may vary significantly.
💡
Upside Surprise Potential
If earnings stabilize (0% growth), PE could expand from 8.6 to 10.9
Stabilization Target:
$49.06
(+27.4%)
PE Expansion Potential:
+27.4%
Share & Embed Analysis
Last updated: May 15, 2026 10:04 PM ET
Data refreshes hourly during market hours. Next update: 11:04 PM
Data refreshes hourly during market hours. Next update: 11:04 PM
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Technical Signals Check
Is LUV showing a specific setup today?
Insider Activity (6 Months)
0
Buys
2
Sells
Net
INSIDERS SELLING
Recent Transactions
Lisa M Atherton
SELL
118 shares
2026-04-07
Ro Khanna
SELL
2026-02-06
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Advanced LUV Option Strategies
Professional options setups generated by AI based on today's LUV price and gamma walls.
